Having no position is a position. But, an automated trading software won’t know how to make the difference.

Trading Theories and Strategies for Manual Forex Trading

Some trading theories didn’t get lost in time. That is, because of manual trading.

If you ask me, automated trading is dull. I agree with the fact that the aim is to make money.

Alright! But managing trading algorithms has more to do with coding and programming, rather than with market knowledge.

Traders that wanted to keep their independence used trading theories that work just fine on the Forex market too. Think of the Elliott Waves Theory, Gann Theory, Point, and Figure, as only the most representative ones.

All of them have an aura of mysticism. There’s not a straight rule that governs trading.

Because of that, programming them becomes difficult. For example, in his last days, Elliott worked on the theory now famous.

But, one can’t program it. Attempts were made, but programmers just don’t understand the concept.

The same with the Gann theory. Astrology and numerology in Forex trading are not that easy to program.

Plus, trading theories claim to decipher a market. Not only the current and past prices but also the future ones.

For that reason, manual Forex trading will survive the test of time through the trading theories practitioners. Trading theories offer another advantage, too.

They let people think. Therefore, a trade with the Elliott Waves Theory comes at the end of a logical process.

Or, finding the defining range with the Point and Figure theory follows the same process. There’s no one measure fits all. Hence, programming them just doesn’t work.

Maybe AI and future developments will handle such problems. Until then, the human touch to markets is here to stay.

However, trading theories and strategies based on them, address the swing trading and investing communities. What’s the need for automated trading if the analysis comes from the more significant time frames?

Manual Forex Trading in the 21st Century

Retail traders have a short-term oriented goal. They want to profit from the market swings, indeed.

But, they have no patience. As such, medium to long-term trading strategies doesn’t work with them. Or, with most of them.

Because of that, they don’t look at bigger timeframes. Their analysis focuses mostly on the hourly and lower timeframes.

Scalping is the right terminology for it. It refers to traders looking to profit from short and very short-term market moves.

However, a growing part of traders looks at the Forex market as an investment opportunity. They avoid fundamental news and just trade on levels.

Swing trading happens when traders keep positions open for a longer time. Typically, trades take between one day and a few weeks until closing.

The only automated trading part in swing trading comes from the pending orders used. That’s it.

On the other day, investing almost exclusively uses manual Forex trading. Because the decision to invest in a currency has a different time horizon, the actual execution losses its importance.

Not once, investors jump on a trade way ahead of the market’s turning point. Moreover, they scale into a position.

That’s done manually too. Because they use macroeconomics and fundamental arguments to back up a trade, automated trading doesn’t make sense for these traders.

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Damyan is a fresh MSc International Management from the International University of Monaco. During his bachelor and master programs, Damyan has been working in the area of financial markets as a Market Analyst and Forex Writer. He is the author of thousands of educational and analytical articles for traders. When being in bachelor school, he represented his university in the National Forex Trading Competition for students in Bulgaria and got the first place among 500 other traders. He was awarded a cup and a certificate at an official ceremony in his university.

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